Bid could help Charlie Ergen build a top U.S. carrier -- with or without Sprint Nextel

The fall of LightSquared and hedge fund manager Phillip Falcone was well documented. For a time it looked like the service provider would become a key partner to Sprint Nextel Corp. (S) with its ambitious satellite LTE scheme.

But the company still holds valuable spectrum, and in the midst of its Chapter 11 bankruptcy it reportedly has received a major bid for that spectrum that could help Mr. Falcone trim his losses and pay of debt, relieving bitter shareholders.

The bid for spectrum was first reported by Bloomberg and is reportedly the work of DISH Network Corp. (DISH) CEO, chairman, and founder Charlie Ergen.

In the midst of his bid for Sprint, DISH CEO and founder Charlie Ergen is looking to make LightSquared's spectrum holdings his latest chunk of acquired spectrum.
[Image Source: AllThingsD]

A judge must approve the so-called "stalking-horse agreement" (a bid that sets the minimum price for an auction-style sale), and the deal must be agreed to before the end of the month, according to Bloomberg's sources.

In March LightSquared entered an armistice of sorts with shareholders, obtaining a small $5M USD loan in exchange for moving ahead into Chapter 11 bankruptcy. Mr. Falcone last week also settled up with the U.S. Securities and Exchange Commission, paying a $18M USD fine for alleged borrowing $113M USD from one of his hedge funds to pay his taxes.

Mr. Ergen's DISH already has received permission to set up a cellular network from the FCC. So if his bid for Sprint fails, he may opt to enter the market anyways, using his horded spectrum to establish a fifth major U.S. carrier brand.